London,
17
July
2020
|
16:37
Europe/London

TAKE-UP IN CENTRAL LONDON IN Q2 DECLINES SIGNIFICANTLY, REFLECTING IMPACT OF COVID-19 LOCKDOWN

  • Q2 2020 Central London take-up represented a 65% decline on Q2 2019, due to lockdown restrictions
  • The largest deal of the quarter saw BP pre-let 201,600 sq ft at Cargo, 25 North Colonnade, E14
  • Return to more normal levels of market activity expected in Q4

Central London take-up declined to just 1.1million sq ft in Q2 2020, with the quarter coinciding with the peak of the UK’s COVID-19 lockdown restrictions. This represents a 56% decrease on the previous quarter and a 65% fall on the same period last year, according to the latest figures from leading real estate advisor, CBRE.

Despite the impact of COVID-19, take-up activity triggered by lease expiries or breaks for space in excess of 50,000 sq ft continued to progress. The largest deal of the quarter saw BP pre-let 201,600 sq ft at Cargo, 25 North Colonnade, E14. The three largest deals transacted during the quarter (all over 50,000 sq ft) were pre-lets, suggesting a continuation of strong demand for best-in-class Grade-A office space. In addition to the BP lease, deals included 85,800 sq ft taken by Covington & Burling at 22 Bishopsgate and 65,900 sq ft taken by Roxor Gaming at Dormeuil House, Golden Square.

We expect demand for agility to drive flex space activity in the second half of the year. As occupiers reopen their offices and reshape their businesses, they will increasingly use flex space as a strategic and tactical lever. Space operated by flex providers, with its shorter commitments and reduced Capex, can play a significant role in supporting occupiers in managing a lower density environment and a greater variety of work settings.
Stewart Smith, Managing Director, CBRE Flex Advisory